Key takeaways:
- Wage theft—which happens when employers fail to pay workers the full wages they are legally owed—is widespread across sectors and affects millions of workers every year.
- Enforcement efforts at the federal, state, and local levels, as well as class action settlements, recovered nearly $1 billion in stolen wages for workers in 2025.
- These recovered wages represent a small fraction of the total amount stolen every year; we estimate that employers rob low-wage workers of more than $50 billion annually.
- Policymakers can combat wage theft by strengthening the right to form unions, establishing greater wage payment transparency, bolstering enforcement capacities, and increasing penalties for perpetrators.
Affordability—or the lack thereof—has dominated the recent political debate in the U.S. Much of the affordability debate has focused narrowly on prices. But the true underlying driver of today’s affordability squeeze is suppressed pay—the result of decades of policy decisions that have weakened workers’ bargaining power. Weakened bargaining power not only suppresses workers’ wages but also makes workers more vulnerable to exploitation. Among the most pervasive forms is wage theft, which robs millions of workers of billions of dollars each year (Cooper and Kroeger 2017; Poydock and Zhang 2024). Wage theft occurs anytime an employer fails to pay a worker the amount they are legally owed for their labor. This can take many forms, including not paying overtime to eligible workers, not providing meal breaks as required by law, or paying workers less than the minimum wage. Existing laws enable workers to recoup these stolen wages through government enforcement, individual wage claims, and class action lawsuits.
Our survey of all states and review of federal data find that nearly $1 billion in stolen wages was recovered for workers in 2025. This figure significantly understates the scale of wage theft, as it only accounts for recovered wages. Further, the Trump administration has pursued policies that make it easier for employers to minimize their liability for wage and hour violations and harder for workers to recoup money they are owed. The report highlights wage theft recovery efforts by the U.S. Department of Labor (DOL), by state agencies, and via class action litigation. Finally, the report provides policy recommendations at both the federal and state levels to combat the pervasive practice of wage theft across the United States.
What is wage theft?
Wage theft is the failure to pay workers the full wages to which they are legally entitled. It can take many forms, including but not limited to:
- Minimum wage violations: Paying workers less than the legal minimum wage
- Overtime violations: Failing to pay nonexempt employees time and a half for hours worked in excess of 40 hours per week
- Off-the-clock violations: Requiring employees to work off the clock before or after their shifts
- Meal break violations: Denying workers their legal meal breaks
- Illegal deductions: Taking illegal deductions from wages for business expenses such as uniforms or use of equipment
- Tipped minimum wage violations: Confiscating tips from workers, or failing to pay tipped workers the difference between their tips and the legal minimum wage
- Employee misclassification violations: Misclassifying employees as independent contractors to pay a wage lower than the legal minimum or avoid paying overtime
The scale and cost of wage theft
Wage theft is a costly and widespread problem that affects millions of workers each year. Research by Cooper and Kroeger (2017) estimates that workers lose $15 billion annually in minimum wage violations alone. This does not account for other forms of wage theft, such as overtime pay violations, off-the-clock violations, or the denial of legal meal breaks. To put that into perspective, Cooper and Kroeger’s (2017) estimate of minimum wage violations alone exceeds the value of any form of property crime reported in Federal Bureau of Investigation data in the last year, including stolen value from all currency ($10.96 billion) and locally stolen motor vehicles ($8.22 billion).1
Wage theft occurs in all industries and impacts all workers, but workers in low-wage industries are significantly more likely to experience wage theft. A 2008 survey of workers in low-wage industries in Chicago, Los Angeles, and New York City found that two-thirds (68%) of these workers experienced at least one pay-related violation in any given week, robbing these workers of nearly $3 billion in wages each year (Bernhardt et al. 2009). Applying these rates to the national workforce, EPI estimates that low-wage workers in the U.S. lost $52.5 billion to all forms of wage theft in 2025 (Shierholz and Sanders 2026). According to DOL, low-wage workers in construction, food service, health care, and retail experience high rates of wage theft (WHD 2026a).
Wage theft is costly not only to the workers whose wages are stolen but also to taxpayers and the communities those workers live in. Failing to pay workers, particularly low-wage workers, the wages they are owed can cause them to fall into poverty. This increases reliance on public assistance, effectively shifting the costs of paying workers away from employers and onto taxpayers. When employers do not pay wages owed, they also suppress consumer demand in local economies because workers have less money to spend, which can hurt small businesses.
In this report, we present findings about the amount of recovered wages, which is only a small percentage of the total stolen from workers every year. Previous EPI reports found that between 2017 and 2020, $3.24 billion was recovered, and between 2021 and 2023, $1.5 billion was recovered (Mangundayao et al. 2021; Poydock and Zhang 2024).
Findings and analysis
In this report, we aggregated available data on stolen wages that were recovered across the United States. To be as comprehensive as possible, we reviewed current U.S. DOL wage enforcement data, surveyed state labor departments and attorneys general, and analyzed data on the largest class action wage and hour settlements.
Our analysis shows that nearly $1 billion in stolen wages was recovered for workers in 2025 through the U.S. Department of Labor, state agencies, and class action lawsuits. Importantly, as stated above, this figure does not account for all wage theft in the United States. Our analysis focused only on wages recovered, not total wages stolen, which we expect to be much greater. Whether it be out of fear of retaliation or a lack of knowledge about their rights, many workers never file a claim to recover stolen wages.
Wage recovery by the U.S. Department of Labor
According to Wage and Hour Division (WHD) enforcement data, U.S. DOL recovered $259 million in fiscal year 2025, as shown in Table 1. These wages were recovered on behalf of 176,957 workers, which equates to $1,465.30 per worker on average.
The U.S. Department of Labor recovered over $259 million in stolen wages for workers in fiscal year 2025
| FY 2025 | |
|---|---|
| Back Wages | $ 259,294,764 |
| Employees Receiving Back Wages | 176,957 |
| Average Amount Recovered per Worker | $ 1,465.30 |
Source: EPI analysis of U.S. Department of Labor, Wage and Hour Division (WHD), “All Acts” (web page), accessed on September 30, 2026.
Breaking down those aggregate numbers by specific violation of the Fair Labor Standards Act (FLSA), we find that overtime violations accounted for the largest share (79%) of total back wages recovered in 2025, as shown in Figure A. Minimum wage violations had the second-largest share at 15%, followed by tip-related violations (5%) and retaliation violations (under 1%).
79% of all back wages recovered due to FLSA infringement were overtime violations in 2025: Share of back wages recovered by DOL by FLSA violation type, fiscal year 2025
| Violation Type | Share |
|---|---|
| Minimum Wage Violations | 14.93% |
| Overtime Violations | 79.37% |
| Retaliation Violations | 0.26% |
| Tip-Related Violations | 5.44% |
Source: EPI analysis of Department of Labor, Wage and Hour Division (WHD), “Fair Labor Standards Act (FLSA)” (web page), accessed on September 30, 2026.
Wage recovery by state departments of labor and attorneys general
During the summer of 2026, EPI contacted state departments of labor and attorneys general via phone and email to compile data on their wage recovery efforts. We collected data, summarized in Appendix Table 1, from 39 states and the District of Columbia. The remaining 11 states either did not recover wages for workers, did not respond to our request, did not track the requested data, or were unable to provide the requested data.2
According to our analysis, state departments of labor and attorneys general in 39 states and the District of Columbia recovered $267 million in 2025.3
Wage recovery through class action settlements
Class action lawsuits, brought by workers themselves, can be an effective way for workers to recoup stolen wages. In Figure B, we present data collected by two law firms, Seyfarth Shaw LLP and Duane Morris LLP, that totals the value of the 10 largest class action lawsuits over the last decade. According to Duane Morris LLP, the value of large class action lawsuits totaled $434 million in 2025.
Largest wage and hour class action settlements totaled $434 million in 2025: Value of top 10 wage and hour class action settlements (in millions), 2012–2025
| Year | Amount (millions) | Amount (millions) |
|---|---|---|
| 2012 | $292.0 | |
| 2013 | $248.5 | |
| 2014 | $215.3 | |
| 2015 | $463.6 | |
| 2016 | $695.5 | |
| 2017 | $525.0 | |
| 2018 | $253.5 | |
| 2019 | $449.1 | |
| 2020 | $249.6 | |
| 2021 | $641.3 | $641.3 |
| 2022 | $574.5 | |
| 2023 | $742.5 | |
| 2024 | $614.5 | |
| 2025 | $434.3 |
Sources: Pre-2021 (including 2021) data comes from Seyfarth Shaw LLP, 18th Annual Workplace Class Action Litigation Report, January 2022. Post 2021 data comes from annual reports from Duane Morris LLP, the most recent being Duane Morris LLP, Wage & Hour Class and Collective Review, January 2026.
One of the largest class action wage settlements in recent years was settled in 2025, with Disney agreeing to pay out more than $233 million to over 50,000 current and former employees of the Disneyland Park (Palm 2025). In 2018, voters in Anaheim, California, passed Measure L—legislation that required resorts in the area to raise the minimum wage to $15 per hour if they receive tax rebates from the city. Disney argued for several years that it was not covered by the new law. Though the trial court ruled in favor of Disney, the appellate court and California Supreme Court disagreed, and Disney ultimately settled—a massive win for Disneyland employees which demonstrates the power of workers joining together to hold employers accountable.
As illustrated above, class action lawsuits are an effective strategy for recovering wages. However, many workers are barred from joining class action cases because they are subject to forced arbitration agreements. According to Colvin (2018), 56.2% of private-sector, nonunion workers are subject to forced arbitration agreements, which typically recover much lower awards for workers than class action lawsuits. For example, Stone and Colvin (2015) find the typical award per worker in forced arbitration ($36,500) is only 21% of the median award in a class action lawsuit in the federal courts ($176,426).
Case studies
The case studies presented below highlight the important work of federal, state, and local enforcement agencies and the power of workers who stand up against their employers to fight for the wages owed to them.
U.S. Department of Labor
In July 2026, the U.S. Department of Labor recovered over $500,000 in back wages and damages for six deli workers in San Diego, California (DOL 2026). Chau Deli was found to have failed to pay workers minimum wage for regular hours and overtime pay for hours worked over 40 per workweek. DOL determined that the employer was paying workers a flat rate of $100 per day, despite the workers averaging 11-hour days. The investigation resulted in each worker being paid approximately $83,000 in back wages.
New York: NYC Department of Consumer and Worker Protection
In January 2026, New York City secured a $5.2 million settlement with three delivery app companies—Uber Eats, Fantuan, and HungryPanda—to pay approximately 50,000 workers who were denied pay for deliveries that customers canceled (NYC 2026). The city’s minimum wage law requires companies to pay delivery workers for the time they spent on the delivery regardless of whether the customer cancels the order.
Minnesota: Department of Labor and Industry
In 2019, Minnesota labor officials began investigating two construction companies, Advantage Construction and Property Maintenance & Construction, for committing wage violations at several construction sites. In 2026, the companies settled and agreed to pay $1.28 million to 26 workers on 19 different projects (Minnesota DLI 2026). This settlement is particularly noteworthy because when construction companies compete for contracts, companies that break the law by underpaying their employees have a competitive advantage. Holding employers accountable for wage theft is pivotal to ensure competition for contracts is based on quality and not exploitation.
Policy recommendations
Federal solutions
As illustrated in this report, wage theft is a costly and pervasive problem for workers in the United States. The Trump administration has only exacerbated this issue by reinstating the “Payroll Audit Independent Determination” (PAID) program, which permits employers who have stolen workers’ wages to confess their violations up front in order to avoid applicable penalties, essentially allowing employers to steal their workers’ wages without facing the full legal consequence (FPW 2025). Further, the Trump administration has proposed policies that would allow large corporations to minimize their liability for FLSA violations. In 2026, the Department of Labor proposed changes to independent contractor status and the joint employer standard under the FLSA. According to EPI analysis, the Trump administration’s proposed joint employer rule would cost workers more than $225.6 million each year in additional stolen wages (Shierholz and Sanders 2026).4 Policymakers should enact policies that protect workers against wage theft and, more generally, build worker power.
One of the best ways to combat wage theft is to strengthen the right to form unions and bargain collectively. Wage theft is exceedingly rare in unionized workplaces because union contracts typically provide covered workers with full transparency and legally binding employer commitments regarding work hours, pay periods, and pay rates (including rules on overtime and premium pay). Union contracts typically have grievance procedures that can quickly resolve any pay-related violations of the contract, ensuring that workers are paid what they are owed in a timely manner and without fear of retaliation.
It is also imperative that Congress increase funding for the DOL’s Wage and Hour Division. Beginning in 2020, the WHD has seen a decline in inflation-adjusted allocation each year (Figure C). The number of full-time employees at the WHD has also decreased consistently over time. Increased funding and investigators will help the WHD recover more stolen wages, investigate additional instances of wage theft, and better enforce the FLSA.
The Wage and Hour Division's funding allocation has declined in real terms since 2020: DOL WHD inflation-adjusted annual allocation, fiscal years 2017–2026
| FY | Inflation-Adjusted Allocation (millions of 2026 dollars) | Full-Time Equivalent |
|---|---|---|
| 2017 | $300.9 | 1404 |
| 2018 | $295.0 | 1355 |
| 2019 | $292.7 | 1297 |
| 2020 | $306.0 | 1382 |
| 2021 | $297.8 | 1340 |
| 2022 | $282.2 | 1260 |
| 2023 | $281.4 | 1267 |
| 2024 | $274.2 | 1245 |
| 2025 | $267.6 | 1151 |
| 2026 | $260.0 | 1053 |
Source: Department of Labor, Wage and Hour Division, FY 2027 Congressional Budget Justification Wage and Hour Division, accessed on September 30, 2026.
Finally, providing workers with greater transparency in their terms and conditions of employment is another key tool for protecting them against wage theft. The Wage Theft Prevention and Wage Recovery Act would require employers to provide disclosures, regular pay stubs, and final payments, which would help workers identify when they have not been paid what they are owed. Increasing the penalties to make wage theft more costly for employers would also help curb the practice. The Wage Theft Prevention and Wage Recovery Act would increase such penalties significantly. The Don’t Stand for Taking Employed Americans’ Livings (Don’t STEAL) Act would do the same by increasing penalties and fines and elevating the most severe violations to possible felony charges.
State and local efforts
As we demonstrate in this report, state and local agencies play an important role in enforcing wage theft laws and recovering stolen wages for workers (Sherer 2025).
While federal legislation combating wage theft has made little progress, many states have taken important action to fill gaps in federal law, such as 1) requiring written pay stubs, 2) ensuring timely pay on scheduled paydays, 3) regulating forms of pay and employer uses of third-party payroll vendors or electronic pay cards, 4) preventing unauthorized paycheck deductions, and 5) mandating prompt payment of final paychecks when a worker’s employment ends.
At a minimum, states can ensure workers greater transparency about their terms and conditions of employment. For example, 44 states and the District of Columbia have laws requiring pay stubs from employers (ADP 2026). This empowers workers to verify if they are being compensated correctly. States can also adopt explicit codes that prohibit payroll deductions without worker authorization, as New York has.5 Additionally, states like Minnesota require employers to provide a written notice with terms of employment at the time of hire (Sherer 2025). Both the initial notice and pay stub documentation can deter unauthorized deductions from paychecks.
Timeliness of payment is another concern that states have the capability to address. States should more widely adopt codes that set consistent, predictable payday intervals. Nevada and others have also taken steps to address prompt payment of a final paycheck.6 To address forms of wage theft related to the growing employer use of third-party payroll services or electronic bank cards to deposit workers’ pay, many states like Arkansas have laws to require their employers to provide the option of receiving wages via check and set standards for the use of pay cards in order to ensure workers receive their full, entitled pay (ADP 2020).
Finally, many states have passed legislation strengthening enforcement of wage theft violations by increasing fines and allowing for enforcement against certain wage payment violations under criminal statutes. Colorado and Connecticut, among several other states, classify wage theft as a felony if certain circumstances are met, which can result in jail time.7 In March 2026, Washington state passed a law which strengthens penalties for repeat offenders and creates a Wage Recovery Account to help unpaid workers receive some of the wages they are owed while cases are ongoing.8
The work of ending wage theft continues
Wage theft is a pervasive epidemic that cheats many workers, families, and communities out of billions of dollars each year. Federal, state, and local enforcement efforts win back some of the stolen wages, but those efforts only recover a small fraction of the total wages stolen. Our report finds that through efforts conducted by the U.S. Department of Labor, by state agencies, and through class action lawsuits, nearly $1 billion was recovered for workers. Although strong examples of recovery efforts exist, much more is necessary to ensure workers are paid what they are rightfully owed, including greater wage transparency for workers, bolstered enforcement capacities by agencies, and meaningful penalties for perpetrators.
Acknowledgements
The authors would like to thank Mallory Miller, Christina Ayon, and Salma Abdi for their research assistance in this report.
Appendix
Wage recovery by state departments of labor and attorneys general, 2025
| State | 2025 | 2025 employment level |
|---|---|---|
| Alabama | NW | 2,378,765 |
| Alaska | $92,378.41 | 365,769 |
| Arizona | $2,300,601.72 | 3,807,590 |
| Arkansas | $1,391,742.48 | 1,438,959 |
| California | NA | 19,850,185 |
| Colorado | $2, 650, 028.00 | 3,254,443 |
| Connecticut | $2,557,888.23 | 1,933,239 |
| Delaware | NA | 516,415 |
| District of Colombia | $7,676,250.13 | 409,378 |
| Flordia | NW | 11,080,810 |
| Georgia | NW | 5,421,660 |
| Hawaii | $139,729.00 | 687,027 |
| Idaho | $444,940.96 | 1,008,027 |
| Illinois | $3,530,400.00 | 6,559,231 |
| Indiana | NW | 3,510,718 |
| Iowa* | $408,322.00 | 1,737,046 |
| Kansas | $896,628.29 | 1,576,650 |
| Kentucky | NA | 2,116,407 |
| Louisiana | NW | 2,091,807 |
| Maine | $447,389.33 | 708,528 |
| Maryland | $2,034,876.00 | 3,231,872 |
| Massachusetts | $156,063,100.98 | 3,943,000 |
| Michigan | $2,951,674.00 | 5,011,265 |
| Minnesota | $3,067,066.42 | 3,176,798 |
| Mississippi | NW | 1,294,995 |
| Missouri | $175,164.00 | 3,166,120 |
| Montana | $532,620.40 | 578,036 |
| Nebraska | $965,757.63 | 1,101,540 |
| Nevada | $2,951,883.09 | 1,671,237 |
| New Hampshire | $63,840.12 | 775,433 |
| New Jersey | $25,600,000.00 | 4,909,106 |
| New Mexico | $610,141.62 | 983,709 |
| New York* | $35,000,000.00 | 10,012,631 |
| North Carolina | $2,500,000.00 | 5,300,672 |
| North Dakota | $316,642.00 | 431,457 |
| Ohio | $206,549.80 | 5,936,935 |
| Oklahoma | $518,745.94 | 2,022,719 |
| Orgeon | NA | 2,219,738 |
| Pennsylvania | $4,865,637.00 | 6,537,899 |
| Rhode Island | $931,438.81 | 593,565 |
| South Carolina | NW | 2,611,841 |
| South Dakota | $85,798.00 | 493,112 |
| Tennessee | NA | 3,536,188 |
| Texas | $1,875,925.16 | 15,921,704 |
| Utah * | $934,043.00 | 1,839,933 |
| Vermont | $203,007.60 | 348,063 |
| Virginia | $645,568.63 | 4,517,843 |
| Washington | $3,124,130.85 | 4,053,622 |
| West Virginia* | $357.503.56 | 781,869 |
| Wisconsin | $959,526.12 | 3,104,218 |
| Wyoming | $222,490.00 | 287,825 |
| TOTAL | $267,291,897.70 | 170,847,599 |
Notes: The seven states that do not recover wages for employees are marked as "NW" in the corresponding table. In addition, "NA" signifies that data was either unavailable or not received by requested deadline.
The 2025 total include some data from 2024 or 2026, as some states tracked wage recovery efforts by fiscal year instead of calendar year.
*Iowa data is from 2025 annual report (Iowa DIAL 2025), New York data is from Wage Theft Dashboard (NY DOL 2026), Utah data is from 2025 annual report (Utah Labor Commission 2025), and West Virginia data is from 2025 annual report (WV DOL 2025).
Sources: EPI survey of state labor departments and attorneys general; employment data are from the Bureau of Labor Statistics, Local Area Unemployment Statistics, September 18, 2026.
Notes
1. Authors’ analysis of Federal Bureau of Investigation Crime Data Explorer data (FBI-CDE 2026).
2. Seven states defer to the federal government for recovery efforts: Alabama, Florida, Georgia, Indiana, Louisiana, Mississippi, and South Carolina.
3. Note that 2025 total includes some data from 2024 or 2026, as some states tracked wage recovery efforts by fiscal year instead of calendar year.
4. EPI conservatively estimates workers will lose roughly one billion dollars ($997.6 million) annually as a result of this rule if it is finalized: more than $772.0 million lost by workers as a result of the rule due to an increase in workplace fissuring and more than $225.6 million in losses by workers as a result of wage theft.
5. NY Lab L § 193 (2025)
6. NV Rev Stat § 608.040 (2025)
7. CO Rev Stat § 8-4-114 (2025) and CT Gen Stat § 31-71g (2025)
8. HB 2479 – 2025-26
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